Haslam to Congress: ACA reform should give power to states

Holly Fletcher and Joel Ebert, The Tennessean

Gov. Bill Haslam is calling on Congress to cede more control over health policy and regulation to the states, as the debate over repealing or replacing the Affordable Care Act rages on in Washington.

In a 19-page blue-print of his vision, the Republican Tennessee governor lays out what he and state officials think are cost drivers to rising health care and insurance costs, as well as encouraging Congress to "be flexible in the timing of any new reforms or revisions to health insurance statutes."

The Senate made the initial move toward repealing the Affordable Care Act early on Thursday with a 51-48 vote on a budget resolution.

Haslam, who crafted his own Medicaid expansion proposal, underscores the importance of insurance to accessing services, and cautions against changes that could cause health insurers to pull out of the 2018 exchange. The state legislature rejected his proposal, Insure Tennessee, in 2015.

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"No conversation about health insurance costs or reform is complete without an acknowledgement that heath insurance is inevitably tied to health care," Haslam wrote in the letter dated Jan. 6 in response to a request from Rep. Kevin McCarthy in December for input from governors.

The letter cautions against moves that would add more uncertainty into the individual market. He wants state insurance regulators to have more control in levying rates based on for individual plans while leaving in effect the pre-existing condition ban.

Haslam raises concerns about maintaining a robust, competitive insurance market and thinks that states "may be better positioned to work with insurance carriers to bring innovative products."

The federally run exchange in Tennessee has seen an on-going drop in the number of insurers selling insurance plans. Currently, there are three insurers selling plans on the exchange, but no insurer is selling statewide.

Congress is moving ahead with repeal measures carried out through the budget process while delaying effective dates until after mid-term elections in 2018. Uncertainty from federal initiatives however could have a chilling effect on the insurance market in the interim.

"Added uncertainty in insurance markets may have the effect of deterring carriers from participating in the market for 2018," Haslam wrote.

Haslam wants states to be able to regulate what is covered by plans, meaning the essential health benefits could vary by states. States should also have control over other aspects of the health insurance market, including the small group market, which is defined as employers with 2-100 employees.

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To work on containing costs, Haslam specifically calls out two factors that state regulators found contributed to rising costs: the costs of air ambulances, often called life flights, and the persistent increase in prescription costs.

The bulk of the letter details questions Haslam posed to Congress about potential changes to Medicaid, giving a peek into how state officials would think about reform if the federal government decides to give states a fixed amount of money, or block grant, with which to run Medicaid.

In November, Haslam and TennCare director Dr. Wendy Long talked about the opportunity the state would have to manage costs, and potentially cover more people through a skinnier benefit, if the incoming Trump administration implemented a block grant system for Medicaid.

Several questions relate to ideas that stem from a small group of state lawmakers tasked by Tennessee House Speaker Beth Harwell, R-Nashville, to look at ways to improve health care access in Tennessee through a TennCare expansion pilot.

The legislative task force, which met throughout 2016, was seeking to implement a two-step approach to expanding coverage. The first phase of implementation sought to cover people with mental health and substance abuse disorders as well as veterans who earn up to 138 percent of the federal poverty line. The second phase, contingent upon phase one meeting quality and cost metrics, would have expanded the pilot to everyone who falls in the so-called coverage gap.

Questions indicate Haslam would like to see states have greater flexibility to manage behavioral health and addiction treatment services.

The governor also raised questions about whether the U.S. Centers for Medicare and Medicaid Services would consider approving work or training requirements for Medicaid enrollees — which has not been favored by officials in President Barack Obama's administration. The task force has been in talks with CMS since last fall, when the state handed of its ideas on the pilot program.

Prescription costs underpin TennCare budget requests

One issue raised whether states could be protected from rising costs associated with Medicare Part D, which is prescription drug coverage, for people who are dually eligible for Medicaid and Medicare. Prescription costs, including those associated with Part D, were flagged as a reason TennCare was increasing its budget request for the next fiscal year in its recent budget presentation.

A spokeswoman for the governor has not received a response from any members of Congress to the letter, which was also sent to every member of Tennessee's congressional delegation.

Sen. Lamar Alexander, R-Tenn., said the governor's letter is "is exactly in line with what Republicans in Congress are proposing: move more health care decisions out of Washington and back to the states so Americans can have more choices of lower cost insurance."

"This means less federal control and more state regulation of insurance provided by employers which is where half of Tennesseans get their insurance. It means more flexibility for states in managing Medicaid," Alexander said. "It also means moving from a federal definition of the kind of insurance available to a more flexible state definition which should help to provide more choices and lower costs in the individual market where there is so much turmoil today."

In his initial letter to Haslam, Congressman McCarthy said, "Additionally, we would be honored if you would join us in Washington early next year to discuss your ideas and better inform the work of Congress."

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The Tennessee Department of Commerce and Insurance Commissioner Julie Mix McPeak was in Washington, D.C. this week meeting with federal lawmakers about reforming the ACA, including Sen. Lamar Alexander.

Reach Holly Fletcher at 615-259-8287 or on Twitter @hollyfletcher. Reach Joel Ebert at 615-772-1681 or on Twitter @joelbert29.

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